Q: ARX is approaching all time highs and yet TOU seems to have no upward momentum at all. I have been hearing for the last few years that TOU is a premium gas stock and the new LNG plant would offer a big boost to the company. With the LNG plant nearing completion I was expecting TOU to start a move upwards. What is happening? Which of ARX & TOU will benefit the most from LNG Canada?
5i Research Answer:
TOU hit an all-time high about six weeks ago. It has underperformed ARX this year and over 52 weeks. Over 10 years, TOU has outperformed ARX by more than 4X, however. The LNG is positive for gas prices, but is hardly 'news' since it has been in the works for so long. Its impact may be priced in to stocks already. Both companies should benefit, though it is hard to specifically quantify. TOU has several existing contracts with other LNG companies so has better diversified LNG exposure currently.